Investors in Asbury Automotive Group (NYSE:ABG) have seen stellar returns of 204% over the past five years
The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on the bright side, you can make far more than 100% on a really good stock. For example, the Asbury Automotive Group, Inc. (NYSE:ABG) share price has soared 204% in the last half decade. Most would be very happy with that. It's also good to see the share price up 17% over the last quarter. But this could be related to the strong market, which is up 13% in the last three months.
Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.
View our latest analysis for Asbury Automotive Group
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Over half a decade, Asbury Automotive Group managed to grow its earnings per share at 44% a year. This EPS growth is higher than the 25% average annual increase in the share price. So it seems the market isn't so enthusiastic about the stock these days. The reasonably low P/E ratio of 5.24 also suggests market apprehension.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
It is of course excellent to see how Asbury Automotive Group has grown profits over the years, but the future is more important for shareholders. This free interactive report on Asbury Automotive Group's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
It's good to see that Asbury Automotive Group has rewarded shareholders with a total shareholder return of 46% in the last twelve months. That gain is better than the annual TSR over five years, which is 25%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Asbury Automotive Group better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Asbury Automotive Group you should know about.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
